On a routine service call, you find that your client’s water heater is over ten years old and nearing the end of its service life. Your client is looking to lower her utility bill but is unsure what kind of water heater will best suit her family’s needs. The last time her water heater failed, she just bought the latest version of the existing water heater. More recently, she has heard about some of the new products on the market, such as tankless and heat pump water heaters. As her trusted advisor, you have the job of selecting the best water heater for your client. Understanding the benefits and shortcomings of each type of water heater—from the standpoint of energy savings as well as amenities—will help you to choose the right model. This article examines the new market for whole-house gas- and electric-fueled water heaters. An article in a future issue of Home Energy will explore alternative water-heating strategies, including solar-thermal and geothermal water heating.